The Best Travel Credit Card Reward Strategy

Travel rewards credit cards offer rewards and other benefits that can help you save money on travel and even enjoy a better experience during the trip.

Having just one travel credit card may be enough if you prefer simplicity and travel infrequently. But if you’re interested in traveling for next to nothing with credit card rewards, you may need a good strategy to achieve your goal.

There’s no single best travel rewards credit card strategy out there because everyone has different travel goals and spending habits. But as you determine the best approach for your situation, here are some things to help you develop your strategy.

If you simply want the best travel rewards credit cards, check out this guide: Best Rewards Credit Cards >>

Understand the Different Types of Travel Credit Cards

There are three types of travel cards, and understanding the differences between them can help figure out which ones are the best fit for you. 

General Travel Rewards Credit Cards

These credit cards allow you to earn rewards with a credit card issuer’s proprietary rewards program. Examples include Chase Ultimate Rewards, American Express Membership Rewards and Citi ThankYou Rewards.

General travel rewards programs typically give up to three ways to redeem your hard-earned points or miles, including:

• Book directly through your rewards account: Some card issuers provide a booking platform that functions similarly to discount travel sites like Expedia and Orbitz. But instead of paying out of pocket to book your flight, hotel or rental car, you use your rewards. This option is convenient, but you may be limited to certain brands, making it more difficult to price shop.
• Book through a third party: Instead of booking through your rewards account, you simply use your card to book travel wherever you want. Then you’ll use your points or miles to get a statement credit for the travel purchase. This redemption option gives you more flexibility and makes it easier to get the lowest price. But each program may have a slightly different definition for travel, so it’s possible to make a purchase that you think is travel-related, but it’s not eligible for redemption.
• Transfer to a travel partner: Rather than using your rewards in their original program, some card issuers allow you to transfer your points or miles to one of their travel partners, which often include airline frequent flyer and hotel rewards programs. This option increases your flexibility and makes it possible to squeeze more value out of your rewards than you can get in the original program.

General travel rewards typically have a set value based on how you redeem them. For example, you may get 1 cent per point for all travel-related redemptions, but only 0.5 cents per point for cash back.

They’re great for redemptions that you can’t get with an airline or hotel credit card, such as rental cars, cruises, and hotel and airline fees. And having a card with transfer partners can give you the flexibility to earn rewards with several hotels and airlines without having to get multiple credit cards.

That said, they typically don’t offer special perks with those programs, such as free checked bags, priority boarding or elite status.

Airline Credit Cards

These co-branded credit cards make it easy to rack up rewards with a single airline, which you can use to score free flights. With most airline credit cards, you’ll also get access to certain perks, including priority boarding, free checked bags, in-flight discounts and sometimes even more.

Unlike general travel rewards programs, frequent flyer programs have a dynamic pricing structure. This means that the value of each point or mile can vary based on a number of factors, including your point of origin and destination, fare class, the cash price of the ticket, travel dates and more.

Airlines don’t publish how much their rewards are worth, but there are many travel rewards websites that provide average point valuations to give you an idea of what to expect. With most airlines, though, you can expect to get more than 1 cent per point or mile on average. And if you’re flexible with your travel plans, you can try different redemptions to see which one will give you the most value for your rewards.

Airline credit cards are great if you’re loyal to one airline, but not so much if you prefer to get the lowest price possible regardless of the airline.

Hotel Credit Cards

Like airline credit cards, hotel credit cards are co-branded with a specific hotel brand and allow you to earn points that you can use to book free stays with that brand. In addition to a rewards program, these cards also offer hotel-specific perks, including complimentary elite status and a free anniversary night’s stay.

Most of the best travel rewards credit cards charge an annual fee, but hotel credit cards’ yearly cost is the easiest to justify if it offers a free one-night stay every year. If you can get more value from that stay than what you pay, you don’t even need to use the card regularly to make it worth your while.

Hotel rewards programs are also similar to frequent flyer programs in that they have a dynamic pricing structure. As a result, the value of your points can vary based on the property, travel dates, room type, cash price of the stay and more.

Most hotel rewards programs offer less than 1 cent per point in value on average, but many hotel credit cards make up for that by offering high rewards rates. These cards are great to have if you’re loyal to one hotel or if you want to take advantage of the free anniversary night. But they limit your redemption options, so they may not be a great fit if you want to be a free agent.

Get Cards The Align With Your Spending Habits

Travel rewards credit cards offer either a flat rewards rate on every purchase you make or a tiered-rewards system that provides bonus rewards on certain spending categories.

Before you pick a card, take a look at your spending habits to determine where you spend most of your money. For example, if you spend a lot at restaurants, consider getting a card that offers bonus rewards on dining purchases. The same goes with travel, groceries, gas and other common categories.

One thing to keep in mind, though, is that travel cards that offer bonus rewards on certain category typically give you only 1 point or mile per dollar on all non-bonus spending. So if most of your spending doesn’t align with a card’s bonus categories, you may not be maximizing your rewards.

One way to get around this is to use multiple credit cards to take advantage of their individual rewards programs. For example, get one card that offers bonus rewards on dining and another that pays out more for groceries or gas. Then use a card that offers a high flat rewards rate on all purchases to use for all of your non-bonus spending.

Know How Many Cards Is Too Much

Having multiple travel credit cards can help you maximize your travel rewards, allow you to diversify your rewards across multiple programs and give you access to more perks.

But the more credit cards you have in your wallet, the easier it is to lose value if you’re not careful.

For starters, because most of the best travel rewards credit cards charge annual fees, diversifying your spending across more than one card reduces the total value you get with each individual card. If that value drops below the cost of the card’s annual fee, the card is no longer worth having. So if you’re planning to take on multiple cards, make sure you’re still getting enough value from each to make the card worth it.

Also, the more credit cards you have, the harder it is to keep track of them. Whether it’s monthly payments or perks, it’s easy to forget when you’re overwhelmed.

To help, consider keeping a spreadsheet of all of your credit cards and their features, so you can check in now and then to ensure you’re still maximizing your value with each. Also, think about utilizing a budgeting software that has a direct import feature. That way, you can keep track of all of your transactions and payments in one place instead of needing to log in to each credit card account separately.

Finally, set up automatic payments on all of your credit cards to avoid accidentally missing a payment. Even if you prefer to pay manually, set up autopay for at least the minimum payment just in case.

There’s no answer to the questions for how many credit cards is too much because everyone is different. As you use these tips, you’ll get a better idea of how many you can handle without losing value or putting your finances and credit at risk.

Always Pay In Full

Earning free travel with travel rewards credit cards is nice, but not if the cost is a sizeable credit card balance and monthly interest charges. The only way to make this work is to stick to a budget, never spend more than you have in your bank account and always pay your balance in full each month.

With this strategy, you can avoid expensive interest charges and ensure that you get the maximum value out of each credit card you own.

3 Travel Rewards Credit Cards to Help You Get Started

If you’re just starting out with the travel rewards hobby, the sheer number of travel credit cards available can be overwhelming. To help you narrow down your selection, here are three of the best starter travel rewards credit cards.

Note: The credit card offers that appear on this site are from companies from which The College Investor receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The College Investor does not include all credit card companies or all credit card offers available in the marketplace.

Chase Sapphire Preferred® Card

The Chase Sapphire Preferred doesn’t have the greatest rewards rates — you’ll earn 3 points per dollar on dining, 2 points per dollar on travel, and 1 point per dollar on everything else. But it offers 60,000 bonus points after you spend $4,000 in the first three months — that’s worth $750 in travel when you use points to book through Chase Ultimate Rewards®.

The card also allows you to transfer your points to nine airline frequent flyer programs and three hotel rewards programs, giving you the chance to get even more flexibility and value out of your rewards.

The card has a $95 annual fee but doesn’t charge foreign transaction fees.

Compare travel cards here >>

Capital One Venture Rewards Credit Card

The Capital One Venture offers a flat 2 miles per dollar on every purchase you make. The card also offers 60,000 bonus miles after you spend $3,000 in the first three months — that’s worth $600 in travel booked through Capital One or as a statement credit on travel booked with a third party.

The card also offers an application fee credit for TSA PreCheck or Global Entry, which provide expedited airport security and customs screening.

The card has a $95 annual fee. It also doesn’t charge foreign transaction fees.

Compare travel cards here >>

Wells Fargo Propel American Express® card

The Wells Fargo Propel American Express Card is a good choice if you’re looking to get your feet wet, but you’re not yet sure you want to go all-in with an annual fee card.

The card offers 30,000 bonus points after you spend $3,000 in the first three months. Those points are worth $300 in travel, cash back gift cards and more. While most purchases will net you just 1 point per dollar, the card also offers 3 points per dollar on:

• Eating out and ordering in
• Gas, rideshares and transit
• Flights, hotels, homestays and car rentals
• Popular streaming services

Next Steps

As we said in the introduction, there’s no single best travel rewards credit card strategy for everyone to follow. But as you consider these steps in forming a good strategy, you’ll have a better idea of what the best strategy looks like for you.

And keep in mind that your strategy may change over time, and credit cards that may be a good fit now may not provide as much value a few years from now. So be flexible with your strategy to ensure that you’re always getting as much value from your travel rewards credit cards as possible.